Statement of Changes in Equity (Reviewer)

What is the purpose of Financial Statement?

Provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users
in making economic decisions.

Forms of Business Organization

• Sole Proprietorship
-he is the owner but he can hire employees; its about ownership not about how many people are working in the company.
• Partnership
-two or more people combining all their assets and resources. Whatever the net income will be divided among themselves
• Corporation
-the ownership is divided into share of stocks. The ownership depends on how many shares you own or hold.

For a sole proprietorship type of business, the Statement of Changes in Equity includes the following items:
Capital balance at the start of the accounting period.
Any additional investments and contributions by the owner.
Net income enjoyed or net loss suffered by the company.
Any withdrawals by the owner.
Capital Balance at the end of the accounting period (adjusted capital balance).

REMEMBER!

The capital balance of the end of the accounting period is the beginning balance on the next accounting period.
Capital Statement for Sole Proprietorship

RECOGNITION COMPANY
Statements of Changes in Equity
For the year ended December 31, 20X8

Capital, December 31, 20X7 P 2,789,647

Add: Additional Investment by the owner 400,000
Add: Net Income 789,674
Less: Withdrawals by the owner - 50,000
Capital, December 31, 20X8 P 3,929,348

Capital Statement for Partnership

Triple J Partnership
Statement of Changes in Equity
For the year ended December 31, 20X8

Jimin Jin Jungkook Total

Capital, January 1, 20X8 P 45,000 P 24,000 P 16,000 P 85,000
Add: Additional Contributions 12,000 12,000 10,000 34,000
Add: Net Income 31,500 31,500 25,000 88,000
Less: Withdrawals - 5,000 - 10,000 - 5,000 - 20,000
Capital, December 31, 20X8 P 83,500 P 57,500 P 46,000 P 187,000
Capital Statement for Corporation

Goto Mami Lothle Corporation

Statement of Changes in Equity
For the year ended December 31, 20X8

Share Share Retained Treasury

Capital Premium Earnings Shares Totals
Capital, January 1, 20X8 P 20,000,000 P 16,000,000 P 15,000,000 P- 4,000,000 P 47,000,000
Issuance of share capital P 5,000,000 P 6,000,000 11,000,000
Purchase of treasury - 1,000,000 - 1,000,000
Net Income 8,000,000 8,000,000
Cash Dividends - 2,000,000 - 2,000,000
Capital, December 31, 20X8 P 25,000,000 P 22,000,000 P 21,000,000 P - 5,000,000 P 63,000,000